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Present value of investments at different interest rates

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A particular business deal allows you the choice of receiving $1,000 today or receiving $2,000 ten years from today. How would your choice change based on your ability to invest money at a very low rate of interest or a very high rate of interest?

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The solution compares Present value of investments at different interest rates (very low rate of interest and a very high rate of interest).

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$1,000 will become $ 2,000 at a rate of interest = 7.18% per year

As $ 1000 x (1+0.0718)^ 10 = $ 2,000
(^ stands for ...

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